Boss Packaging shares erase entire listing gains, dive 9% from day's high level on NSE SME

Shares of Boss Packaging Solutions today staged a decent debut on NSE's SME platform at Rs 82.50, a premium of 25 per cent over their issue price of Rs 66.

As the session progressed, the stock climbed further to hit a day-high of Rs 86.60. Later, it wiped out the entire gains and slipped 9.47 per cent from day's high level to Rs 78.40.

The SME (Small and medium-sized enterprise) initial share sale of Boss Packing received 135 times subscription. The company, which supplies packaging machines, labelling, capping, and filling equipment, had an issue size of a little over Rs 8 crore. Yet, it received bids worth Rs 1,073 crore.

The SME issue opened for subscription on August 30 and closed on September 3.

Founded in 2012, the company is engaged in manufacturing, supplying, and exporting a diverse range of packaging, capping, and filling machines. Its offerings also include self-adhesive sticker labelling machines, conveyors, turntables, web sealers, and sleeve applicators.

The Ahmedabad-based company operates out of a modest 500-square-yard facility. Its net debt has also increased significantly, rising by 82 per cent to Rs 3.06 crore in 2023 from Rs 1.64 crore in the year-ago period.

The company plans to use the net proceeds from the issue for several purposes, including the purchase of machinery, funding working capital requirements, and general corporate purposes.

Market regulator Sebi has recently advised 'intermediaries' aiding the SME listings, urging them to say 'no' to potentially problematic issuers.

According to Sebi Whole-Time Member Ashwani Bhatia, some SME promoters offer chartered accountants and merchant banker fees as high as 25 per cent of the initial public offer issue size.

The market regulator had in July set a 90 per cent listing gains cap on SME IPOs. This was followed by a two-page advisory in the last days of August where the regulator warned of unscrupulous SME promoters.